Case Law Details
CIT Vs Maruti Suzuki India Ltd. (Delhi High Court)
The Delhi High Court decided an appeal filed by the Revenue against the Income Tax Appellate Tribunal’s order dated 30 June 2008 for Assessment Year 2004-05. Four substantial questions of law were framed for consideration.
The first issue concerned whether duty drawback accrued to the assessee in the year of export or only upon passing of the order by the appropriate authority. The High Court answered this question in favour of the assessee and against the Revenue, holding that the Tribunal had not erred.
Read SC Judgment in this case: Duty Drawback Accrues After Approval: SC Upholds Delhi HC Ruling
The second issue related to whether unutilized MODVAT credit of earlier years, adjusted in the relevant assessment year, should be treated as actual payment of excise duty under Section 43B of the Income Tax Act, 1961. The Court answered this question in the affirmative in favour of the assessee and against the Revenue.
The third issue involved deletion of an addition of Rs. 6,17,26,038 made by the Assessing Officer on account of alleged excess consumption of raw materials and components. The High Court answered this issue in favour of the assessee and upheld the Tribunal’s order deleting the addition.
The fourth issue concerned whether deduction allowable under Section 80-IB was required to be reduced from business profits while computing deduction under Section 80HHC. Referring to the decisions in Great Eastern Exports v. CIT and Associated Capsules (P.) Ltd. v. DCIT, the Court answered this question in favour of the Revenue and against the assessee.
Accordingly, the appeal was disposed of with Questions 1, 2, and 3 decided in favour of the assessee, while Question 4 was decided in favour of the Revenue.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This is an appeal by the Revenue against the impugned order dated 30thJune 2008 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No.2696/Del/2007 for the AY 2004-05.
2. While admitting this appeal on 28thJanuary 2010, the following questions of law were framed for consideration:
1. Whether the Income Tax Appellate Tribunal (ITAT) erred in holding that duty drawn back accrues to the assessee only on passing of the order by appropriate authority and not in the year of export?
2. Whether the ITAT is right in law in holding that unutilized MODVAT credit for earlier years adjusted in assessment years in question should be treated as actual payment of the excise duty under Section 43B of the Income Tax Act, 1961?
3. Whether on the facts and circumstances of the case the ITAT erred in deleting the addition of Rs 6,17,26,038/- made by the Assessing Officer on account of alleged excess consumption of raw materials and components shown by the Assessee?
4. Whether the ITAT erred in setting aside the order of CIT (A) and direct the Assessing Officer not to reduce the amount of deduction allowable under Section 80-IB from the profits of business for the purpose of computing deduction under Section 80HHC?
3. In view of the decision of this Court rendered today in ITA No. 250 of 2005:
(a) Question 1 is answered in the negative, i.e. in favour of the Assessee and against the Revenue.
(b) Question 2 is answered in the affirmative, i.e., in favour of the Assessee and against the Revenue.
(c) Question 3 is answered in the negative, i.e. in favour of the Assessee and against the Revenue.
4. As far as Question 4 is concerned, in view of the decisions in Great Eastern Exports v. CIT [2011] 332 ITR 14 (Del) and Associated Capsules (P.) Ltd. v. DCIT [2011] 332 ITR 42 (Bom), it is answered in the affirmative, i.e. in favour of the Revenue and against the Assessee.
5. ITA No. 397 of 2009 is disposed of accordingly.
Author Bio
